Ocean Carriers, Others Pay Penalties

Thursday, March 11, 2010

The Federal Maritime Commission announced four compromise agreements in which an ocean carrier and intermediaries agreed to pay a total of $625,000 in civil penalties for alleged violations of the Shipping Act of 1984. The agreements were reached with a vessel-operating common carrier (VOCC) and three ocean transportation intermediaries (OTIs). The agreed penalties resulted from investigations conducted by the Commission's Area Representatives in Los Angeles, Seattle, South Florida, and Washington, D.C. Staff attorneys with the Bureau of Enforcement negotiated the compromise agreements. The parties settled and paid penalties, but did not admit to violations of the Act or the Commission's regulations.

Federal Maritime Commission Chairman Richard A. Lidinsky, Jr. praised the Commission's Area Representatives and Bureau of Enforcement for their hard work protecting competition and the shipping public: "These penalties should serve as a reminder to any carriers or intermediaries who may be tempted to disregard the Commission's rules against unfair or deceptive practices. The Federal Maritime Commission's team on the front lines will be vigilant in protecting the emerging green shoots of recovery in the ocean shipping industry, international trade, and the larger economy."

The compromise agreements are:
China Shipping Container Line: China Shipping Container Line is an ocean common carrier headquartered in Shanghai and controlled by the government of the People's Republic of China. China Shipping agreed to pay $440,000 as part of a compromise agreement. That agreement settled alleged violations of the Shipping Act of 1984 that involved more than one thousand shipments over four years. These alleged violations included: (1) providing transportation services to intermediaries that did not have tariffs, licenses, or bonds as required by the statute; (2) misdescribing cargo they shipped; (3) allowing use of service contracts by persons who were not parties to those contracts; and (4) providing transportation that was not in accordance with the rates and charges set forth in published tariffs. China Shipping provided the Commission with information regarding the activities at issue, terminated those activities, and agreed to cooperate fully with any further Commission investigation regarding those activities.

A.T.I. U.S.A. Inc.: A.T.I. U.S.A. Inc. is a licensed and bonded Non-Vessel Operating Common Carrier (NVOCC) and freight forwarder based in Elizabeth, New Jersey. A.T.I. paid $115,000 in civil penalties pursuant to a compromise agreement. The Commission alleged that A.T.I. violated sections 10(a)(1), 10(b)(1), and 10(b)(2)(A) of the Shipping Act of 1984 by obtaining transportation services at less than applicable rates and charges for ocean common carriers, and by charging rates that did not comply with its published tariffs. Specifically, the Commission alleged that ATI misdeclared the measurements of certain shipments of motor vehicles and permitted use of service contracts by persons who were neither signatories nor affiliates to those contracts.

MT Global Freight Solutions Inc.: MT Global is a licensed and bonded NVOCC located in Grapevine, Texas. MT Global entered into a compromise agreement with the Commission, and pursuant to that agreement, made a payment of $35,000. The Commission alleged that MT Global violated section 10(a)(1) of the Shipping Act by obtaining transportation services at less than applicable rates and charges by unlawfully accessing service contracts to which MT Global was not a signatory or affiliate, and violated section 10(b)(2)(A) of the Act by providing ocean transportation services at other than the rates or charges provided in its published tariffs.

Cosa Freight Inc.: Cosa Freight Inc. is a licensed and bonded NVOCC located in Pomona, California. Cosa Freight made a payment of $35,000 pursuant to a compromise agreement. The Commission alleged that Cosa Freight obtained, and allowed others to obtain, ocean transportation for property at less than the rates and charges that would otherwise be applicable by improperly accessing and allowing others to access service contracts to which Cosa Freight was not a signatory, in violation of section 10(a)(1) of the Shipping Act. The Commission also alleged that Cosa Freight violated section 10(a)(1) of the Shipping Act by misdescribing commodities that were shipped.